Jan 15 (Reuters) – Chicago Federal Reserve President Austan Goolsbee mentioned on Thursday the U.S. central financial institution must be centered on getting inflation down amid ample proof of job market stability, in feedback that saved alive the prospect of rate of interest cuts later this 12 months.
“There’s still strength” within the job market and “I think the most important thing facing us is we’ve got to get inflation back to 2%,” Goolsbee mentioned in an interview on CNBC. “Rates can go down still a fair amount,” with cuts even taking place this 12 months, however “we have to have convincing evidence that we’re on path back to 2% inflation.”
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Pointing to the most recent claims knowledge, Goolsbee mentioned “I’m not surprised by these low numbers. I’ve been saying, as you know, for months, that our labor market indicators coming out of the Chicago Fed suggest strongly that there’s stability in the labor market.”
GOOLSBEE WARNS ABOUT INFRINGING ON FED’S INDEPENDENCE
The president has repeatedly pressured the Fed to ship giant charge cuts.
Goolsbee provided help for Powell’s assertion and warned about interfering with the central financial institution’s independence.
“To try to blow up Fed independence is kind of a festering stink bug in the middle of that road back to 2%,” he mentioned.
“I know that there have been countries that had criminal investigations of their central banks, but those countries are Zimbabwe and Russia and Turkey and a bunch of places that you would not characterize as advanced economies,” Goolsbee mentioned.
“Anything that’s infringing or attacking the independence of the central bank is a mess, you’re going to get inflation come roaring back if you try to take away the independence of the central bank.”
Reporting by Michael S. Derby; Editing by Paul Simao
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